GROUP 4TOPIC: COMPETITION

Group members:

Claudino JuaquimLaimi JeremiaVictoria ShimweefeleniHelena ImbiliNdapandula Efraim

Presentation Outline Competition Competition-based pricing strategy Policies in competition based pricing Price setting process Steps in pricing procedures Brand leader responses to price cuts

Presentation Outline cont… Price environment Reacting to price competition Market structure & pricing Non- price competition

Competition

Competition: Rivalry Goals Increasing profits

Competition-based pricing strategy

Definition Pricing their products in line with those of the competitors Checking on prices of competitors before pricing their own Same price, of slightly below

Policies involved in competition based pricing:

Premium pricing Discount pricing Parity pricing Product line pricing

Steps in Setting the price

Steps involved in pricing procedures

Identify the target market

-Market position

-price imageDetermine

price elasticityProduct life

cycle

Competitor’s prices

Other environmental

factorsChoose pricing

methodConduct

periodic review

Brand Leader Response to Competitive Price Cuts

Price Environment

Price Environment Different type of environment: Market-controlled environment Company-controlled environment Government-controlled environment

COMPETITIVE PRICING RELIES ON 3 FACTORS:

lasting distinctivenesslow cross elasticity and perishable distinctiveness

Option for reacting to price competitions

Options for reacting to Price competition

Competitor lowers price in homogenous market: Try augmenting the product Alternatively, meet the price cut head-on

( Copyright-Marketing institute of Singapore)

Option for reacting to price competitions cont…..

If competitor raises price in non-homogenous market, evaluate:

Reason for price change If price change is temporary Effect on your market share & profit The likely responses from other competitors

Market Structures

Competition considerations: (monopoly)

One dominant supplier determine price without regard for competition Ability to increase or lower price without worrying about

competitors Price based on quality, demand, market structure etc.

Competition considerations: (oligopoly)

Few firms small number of large suppliers. compete on a non-price basis Based on variables such as service quality

customer relationships or branding.

Competition considerations: ( perfect competition)

large number of buyers and sellers High competition Price closely related or similar

Competition considerations: (Monopolistic competition)

characterised by numerous competitors Similar but differentiated products e.g restaurant Price according to design, quality brand image and

product features the existence of intense price competition is evidence of

the lack of meaningful product differentiation.

None-price competition

None-price competition Company tries to increase market share of its product

by: Not changing the price of the product/service But, by persuading the target customers of the

superiority or advantages associated with it.

ACKNOWLEDGEMENTS: http://theorybiz.com/the-strategy-and-tactics-of-pricing/competition/1794-how-should-you-react.html(McConnell-Brue, 2002, p. 43.7-43.8).Marketing Institute of Singapore. Pricing Strategies for the Asia pacific. Retrieved from http://www.apmf.org.sg/Lt9--PricingStragsforASPAC.PPT)Raju, J. & Zhang, Z.J. (2010) Smart pricing: How Google, Priceline, and leading businesses use pricing innovation for profitability, 1st Edition, New York: Pearson EdCram, T. (2005). Smarter pricing: How to capture more value in your market, New York: Pearson Ed.

Now lets get to the real deal… TEST TIME…

ALL THE BEST!

Test

1. Name any 3 steps in setting price 2. Name the 4 policies involved in Competitive Based

Pricing 3. How do Marketers price their products in a Monopoly

Market? 5. How do Marketers price their products in a Perfect

competition? 6. What is meant by Non-price competition? 7. Define Competition and another name for it 8.Define competitive based Pricing